Took more than scary streets to push Oracle OpenWorld to Las Vegas

Howard Street between Third and Fourth streets was closed and transformed into a lounge for attendees of Oracle Open World in 2018.

Photo: Michael Cabanatuan / The Chronicle 2018

Oracle’s decision to move its annual giant OpenWorld conference to Las Vegas next year sent a $64 million shock wave through the city’s tourism circles, but insiders say they’d seen it coming for some time.

The software giant cited San Francisco’s high costs and poor street conditions — a polite way of saying bad behavior by sidewalk residents — as the reason behind the exit.

It’s not the first time Oracle raised the issues.

“The afternoon (before) Mayor Ed Lee passed away, representatives from Oracle were in his office expressing some of the same concerns,” San Francisco Travel CEO Joe D’Alessandro said. “The mayor committed to help clean up and improve security” around Moscone Center.

But it wasn’t just the scary nature of San Francisco’s streets that led to Oracle’s exit. The rising cost of holding a convention in the city was also a factor.

For example, the average cost of a San Francisco hotel room this year is $254, compared with $129 in Las Vegas, according to the hotel brokerage firm Atlas Hospitality Group.

“Our hotels are not overcharging,” D’Alessandro said. “It’s that the cost for everything is higher here than other cities, so they have to charge more.”

City Hall insiders say another factor may have been the rise of Salesforce’s annual Dreamforce gathering, which with 171,000 attendees draws more than twice as many people as Oracle’s 60,000.

Whatever the reasons, D’Alessandro said Oracle’s exit was in some ways inevitable.

“After 20 years here, there may have been the feeling that they needed something new and someplace new,” D’Alessandro said.

There is some good news. The medical association that pulled out of the city last year, in part over concerns about street safety, has agreed to return in 2023.

“We do surveys after every convention, and 94% of the guests still say they want to come back to San Francisco,” D’Alessandro said.

San Francisco Chronicle columnist Phil Matier appears Sundays and Wednesdays. Matier can be seen on the KGO-TV morning and evening news and can also be heard on KCBS radio Monday through Friday at 7:50 a.m. and 5:50 p.m. Got a tip? Call 415-777-8815, or email pmatier@sfchronicle.com. Twitter: @philmatier

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